Full Speed Ahead to the 100 MPG Car

NEW YORK — Working to push forward the race for higher mileage vehicles, Progressive Auto Insurance started the X Prize competition in late 2006. After wrapping up the second round of the judging phase in April, those cars still in contention for the $10 million prize are ready to take to the road for more detailed testing.

Getting more cost-effective cars to market everyone’s wish. But isn’t that automakers’ job in the first place? Why the need for a competition and a lofty prize?

Cliche it may be, but adding a prize to the mix “puts a target out there and creates a more competitive platform,” Eric Cahill, Senior Director of the X Prize competition, told the 2010 Wired Business Conference on Tuesday.

Nothing works better than stoking demand, and nervously watching others enter the market.

But there’s more to the story than the simple “competitive platform” cliche. Cahill explains that the competition is not designed for established players — the Toyotas, the Hondas, the Audis. The competition is designed for smaller, even amateur automakers to take part in the race and let their ideas for revolutionary automotive technology come to life.

In other words, the X Prize competition is designed to let startups do what they do best — shake the establishment, disrupt by design and, ideally, innovate the way to the future.

“We are trying to put pressure on global auto makers to take notice,” Cahill said. “Nothing works better than stoking demand, and nervously watching others enter the market.”

Sticking with the theme of the conference, he added that the X PRIZE competitors and other start-ups need a “disruptive” business model. “They can’t just come in and use the same distributions channels, because that’s very high risk if you’re a startup.”

Undoubtedly, there is room for new business models, and more importantly, new technologies. Teams made up from every stage of automotive experience, from high schoolers to experienced automakers, have entered the X Prize contest and have offered a variety of new possibilities.

“There’s nothing magical, no magic pixie dust under the hood,” says Cahill. “What we’re seeing is a recombination of existing automotive technologies, but also new technologies, new systems.” Among those new ideas he has seen in the competition, he listed new fuels like biodiesel and ethanol, electric motors, a decrease in the number of wheels, the use of more lightweight materials and downsizing the combustion system itself.

Though the competition is framed as a “race for 100 MPGe” (miles per gallon or energy equivalent), Cahill acknowledges that really, the idea is just to drive forward automotive innovation. By letting the small guys flesh out their ideas, the bigger companies will, ideally, take notice, and invest in the new technologies.

“We’re trying to accelerate the timetable to bring these technologies to market,” said Cahill. “We’re in the middle of this disruptive transition right now, and it’s an early onset for the auto industry.”